Form 8863: Education Credits

Form 8863 is used to calculate certain education credits for eligible students and qualified education expenses.

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Introduction

Form 8863, Education Credits, is a federal tax form used by eligible taxpayers to calculate certain education credits. The form may apply when qualifying education expenses are paid for an eligible student and the applicable requirements are met.

This guide provides general information about Form 8863, including who may use the form, the information commonly needed, and the basic process for completing it. The information is intended to provide a simple overview of Form 8863 and its general purpose.

What Is Form 8863?

Form 8863 is used to calculate education credits for qualifying education expenses. The form generally applies to eligible students and taxpayers who meet the requirements for an applicable education credit.

Form 8863 commonly involves:

Student information
Eligible educational institutions
Qualified education expenses
Tuition and related expenses
Scholarships and grants
Applicable education credits
Credit calculations
Supporting education records

The information reported on Form 8863 should generally be based on the taxpayer’s education records, school statements, payment records, and other applicable documentation.

Who Uses Form 8863?

Form 8863 may generally be used by eligible taxpayers who paid qualifying education expenses for themselves, a spouse, or an eligible student. Eligibility can depend on the taxpayer, student, education program, expenses paid, and other applicable requirements.

Not every education expense or student qualifies for an education credit. Taxpayers should review their education records and applicable requirements to determine whether Form 8863 applies to their circumstances.

What Information Is Needed?

The information needed to complete Form 8863 generally comes from school statements, tuition records, payment records, scholarship or grant information, and other education records. Accurate records can help determine the applicable education credit.

Common information includes:

Taxpayer name
Taxpayer identifying information
Student name
Student identifying information
Educational institution information
Qualified education expenses
Tuition and related expenses
Scholarships and grants
Applicable education information
Credit calculation information
Supporting education records

The specific information required may depend on the type of education credit being claimed and the taxpayer’s circumstances.

How to Fill Out/Complete Form 8863

Form 8863 is generally completed by identifying eligible students, determining qualifying education expenses, accounting for applicable scholarships or grants, and calculating the available education credit. The information should generally agree with the taxpayer’s education and tax records.

The basic process is to gather the required student and education information, determine which expenses may qualify, enter the applicable amounts, complete the credit calculations, and review the completed form before submitting it with the applicable tax return. Taxpayers should retain supporting education records.

Section 1

Enter the taxpayer and student identifying information required by Form 8863. This generally includes information needed to associate the education credit with the taxpayer and eligible student.

The information should be reviewed carefully to make sure it is accurate and consistent with the taxpayer’s tax records and education records.

Section 2

Identify the eligible student and applicable educational institution information. This generally involves reviewing school records and other documentation associated with the student’s qualifying education.

Taxpayers should verify the student and institution information before completing the applicable credit calculation.

Section 3

Enter qualified education expenses. These amounts generally come from tuition statements, school records, receipts, payment records, and other documentation showing the education expenses paid.

Taxpayers should review the expenses carefully and retain records supporting the amounts reported on Form 8863.

Section 4

Enter applicable scholarship, grant, or other education assistance information when required. These amounts may affect the education expenses used in determining the applicable credit.

Taxpayers should compare the information with school statements and other education records to help ensure the amounts are reported accurately.

Section 5

Complete the applicable education credit calculation. The calculation generally uses qualifying education expenses and other applicable information to determine the amount of education credit available.

Taxpayers should review the calculation carefully and make sure the amounts used are supported by their education and tax records.

Section 6

Complete any applicable additional credit information or calculations required by Form 8863. The information may depend on the type of education credit being claimed and the taxpayer’s circumstances.

Taxpayers should include only information that applies to their situation and maintain supporting records for the amounts reported.

Section 7

Determine the final education credit amount to be reported with the taxpayer’s federal tax return. The final calculation should generally reflect the eligible student, qualifying education expenses, applicable education assistance, and completed credit calculations.

Taxpayers should compare the final amount with their supporting education and tax records before submitting the return.

Section 8

Review the completed Form 8863 and make sure all applicable information has been entered. Check the taxpayer information, student information, educational institution information, qualifying expenses, scholarships or grants, calculations, and final credit amount.

The completed form should generally be included with the applicable tax filing when required. Taxpayers should also keep a copy of Form 8863 and supporting education and tax records for their records.

Final Review

Review Form 8863 after completing all applicable sections. Check the taxpayer information, student information, educational institution information, qualified education expenses, scholarships or grants, credit calculations, supporting records, and final credit amount.

A final review can help identify calculation or reporting errors before the form is submitted. Taxpayers should retain Form 8863 and supporting education, payment, and tax records with their tax records.

Common Mistakes

Common Form 8863 mistakes may include claiming expenses that do not qualify, entering incorrect student information, or using incorrect education expense amounts. Failing to properly account for scholarships, grants, or other education assistance can also affect the credit calculation.

Other mistakes may include entering information in the wrong section, using unsupported expense amounts, overlooking applicable requirements, leaving required information incomplete, or submitting the form without reviewing it. Comparing Form 8863 with school statements, payment records, education records, and tax records before filing can help identify potential errors.

Related IRS Forms

Taxpayers may encounter other federal tax forms when reporting education expenses, education benefits, income, and tax credits. Different forms are used for individual tax reporting, education information, and other applicable tax benefits.

Common related forms include:

Form 1040 for individual federal income tax reporting
Form 1098-T for certain tuition information reported by educational institutions
Form 8862 for certain credits claimed after a prior disallowance
Form 8880 for the retirement savings contributions credit
Form 8917 for the tuition and fees deduction when applicable

The appropriate form depends on the taxpayer’s specific circumstances and the type of education expense, credit, or tax information being reported.

Where to File or Submit

Form 8863 is generally submitted with the applicable federal income tax return when required. The appropriate filing method depends on the taxpayer’s circumstances and the type of return being filed.

Taxpayers should review the applicable filing requirements before submitting Form 8863. A copy of the completed form and supporting education, payment, and tax records should generally be retained for the taxpayer’s records.

Current IRS Form & Instructions

Taxpayers should use the applicable version of Form 8863 and its instructions when preparing the form. Forms and requirements can change, so the version used should correspond with the reporting period and circumstances being reported.

Before submitting Form 8863, review the form and instructions carefully and confirm that the information agrees with the taxpayer’s education, payment, and tax records. This can help identify errors before the form is submitted.

Important Information / Disclaimer

This Form 8863 guide is provided for general informational purposes only and is intended to provide a basic overview of Form 8863 and common information associated with calculating certain education credits. This information is not tax, legal, accounting, or financial advice, and education credit requirements can vary depending on the taxpayer’s circumstances, eligible student, educational institution, and qualifying expenses.

Taxpayers are responsible for determining their applicable filing, payment, recordkeeping, and reporting requirements, and information on this page may not cover every situation, exception, or special rule that may apply. When appropriate, taxpayers should consider seeking assistance from a qualified tax professional or other qualified advisor regarding their specific tax situation, education expenses, education credits, or Form 8863 filing requirements.